Poker winnings and Tax
I am interested in the tax laws of the various countries around the world with regards to poker income. For instance in my country, the United Kingdom, we are not required to pay taxes on poker winnings or in fact any gambling winnings at all including stuff like sports betting, lottery wins etc. I would not go as far as saying it is absolutely written in law that this is the case but it is almost certainly the case.
A short article on UK tax laws regarding poker by Joe Beevers.
Of course I am not just going on this, I have contacted an accountant who confirms this to be the case and also my financial adviser at the bank also confimed this when I was opening up savings accounts (In fact, for my employment status I had to claim I was unemployed which I was told to do by my financial adviser). Most people need to pay tax on interest acrued from a savings account but I am able to claim the full gross amount of interest generated at the end of the year.
So, we are pretty clear on the UK tax situation. So what is it like in your country? I would be interested to hear some detail on it if possible in the comments if you know anything about it. Also any further info on UK tax laws regarding poker would be great too.
So Sweden? Holland? Denmark? Norway? USA? Australia? South Africa? What is the deal with your countries =) Let me know, I'm curious.
A short article on UK tax laws regarding poker by Joe Beevers.
Of course I am not just going on this, I have contacted an accountant who confirms this to be the case and also my financial adviser at the bank also confimed this when I was opening up savings accounts (In fact, for my employment status I had to claim I was unemployed which I was told to do by my financial adviser). Most people need to pay tax on interest acrued from a savings account but I am able to claim the full gross amount of interest generated at the end of the year.
So, we are pretty clear on the UK tax situation. So what is it like in your country? I would be interested to hear some detail on it if possible in the comments if you know anything about it. Also any further info on UK tax laws regarding poker would be great too.
So Sweden? Holland? Denmark? Norway? USA? Australia? South Africa? What is the deal with your countries =) Let me know, I'm curious.
posted by TillerMaN | 11:45 AM
29 Comments:
In Finland no taxes.
Over here in Germany we have got a law saying "Glücksspielgewinne sind nicht versteuerungspflichtig.", which means that you do not have to pay any taxes on winnings you get by gambling, which, until yet, poker is counted to as well. The fact that you might have a lot of money resulting from these winnings can change the amount of services you might get from the country such as support for the unemployed and so on.
Another problem which isn't fully solved yet is that gambling for money is illegal as long as the casino or lottery or whatever has no license given by German institutions, which is the fact on Poker sites which aren't lead by a German country...
So in theory there is a law which might make internet poker illegal, but until today it hasn't been punished.
so far cKone
@ckone
in some forums there are discussions about the taxlaws if u play poker online in germany.
i read, it isnt allowed to play onlinepoker in some states of germany. Im not sure "Sachsen" or "Sachsen-Anhalt" is one.
The proof of this is, some online casinos deleted this states out of the list at the registration.
As I wrote in another post yesterday poker winnings from european sites is tax free in sweden. However sites like PP or UB is not within EU so from these we need to pay tax. But on the other hand there is really no possibility for them to know what sites you win money on as long as you use neteller or similar to transfer the money.
In sweden we have this law that says that banks who get a deposit of around 15 000 euro or more from a foreign source must declare this with the department of finance (for money laundry reasons I guess). They are supposed to investigate this and if they cant find anything illegal they send it on to the tax authorities. So I am expecting to get an inquiry from them in a year or two (perhaps 10 =) when all papers have passed through their system. I have no clue how to prove the money is from poker though. My own excell spreadsheets and PT databases are probably not enough for them...
One funny thing for sweden...
If you play somewhere where you must pay taxes for your wins there is a thing you must consider. The tax laws are made for sports betting and lotteries. This means that your losses are not deductable from your winnings. So if you win a pot of 500 $ and lose a pot of 1000 $ the hand thereafter you are actually still needed to pay tax for the win of 500$. In reality this means that if you play like 1/2 $ limit holdem you would after an break even session of a few hours owe the swedish tax authority around 1000$ (havent calculated this number but you get the point) in tax. =)
haven't heard about such things inbetween the German Bundesländer but it might be. I come from "Schleswig-Holstein"
cashout from party to neteller to multipoker to visa card, do u still pay tax?
akka.. ?
Yeah technically you should pay tax but as I said there is now way for the tax people to know where the money came from. However I believe you are responsible for showing the origin of the money. If you claim they were earned on multipoker and back it with some substance (like I have an account there, I won this tournament whatever) there should be no problem. (Maybe I am doing something illegal by giving advice on how to skip taxes)
Disclaimer: I don't want to get a huge back tax in 4 years when the tax people have worked out a deal with party and figured out how much money you earned. Therefore I choose to play on sites that truly are tax free.
Are multipoker fine with you transfering money using their pay system? I doubt that. It may work once or twice but if you do it often and with large sums I guess they will say stop.
Might add that the disclaimer thingy is very very unlikely to happen. I just like to sleep good at night.
I'm from portugal and as far as I know the situation here is pretty similar to yours (UK).
If an American citizen moved to the UK, would he still have to pay income tax on poker winnings?
US residents pay full tax on poker winnings. If it's your main source of income, you also pay self-employment tax.
If a US resident lives abroad for more than 320 days or so a year, their first 80k of poker income *MAY* be exempt -- I've heard tax experts argue both sides of this. There is an 80k exemption for *EARNED* income in this case, but nobody's sure if poker income is considered earned in this context.
In Australia, online gambling is illegal, but there is no tax on winnings of other gambling.
I can't believe that Amerikkka is the one taxing poker winnings and the socialist tax-loving EU isn't. Maybe I'll have to renounce my US citizenship.
canada.
identical.
can and brit tax code on this is functionally the same.
I'll see if I can get the legislative correct answer to this.
Do you receive unemployment money in the UK (+ your poker winnings)?
You should be able to make quite a few money then :)
No, I don't claim unemployment benefit. I think that would be pushing the system a bit far =)
But seriously, I'm pretty sure you need to declare your bank balance when you apply for it anyway and if its too high you won't get it anyway.
plus you'd need to visit the credit counsellor periodically and demonstrate that you're looking for work
hahahaha
Dansk Tipstjeneste (very protectionistic bookmaker in Denmark) has various sorts of game types, e.g. Lotto, regular odds etc. Winning on any of their game types you have to pay 15% taxes for any prize above DKK 200 (approx. €30).
However I'm not sure you have to pay taxes if it's Poker earnings...
Trying to figure it out...
Ahhahahahahha. You'll crack when you hear the brazilian law.
Here every gambling transaction is seperate from one another. You have to pay a 25% tax on each one of them.
In poker, that means a HAND.
Saying in other terms: Every HAND you win in poker, you pay 25%, and you cannot deduct losing hands from winning hands.
So, obviously if you play like all day long, even if you have a big NET PROFIT, it won't be enough to pay all the taxes you owe, and you'll have a huge debt with IRS.
Oh, and gambling is illegal (state owned bingos, lottery, etc is not) but gambling on the internet is not illegal in any way.
Online gambling is illegal in Australia, but the gambler will not be prosecuted, it is the provider. It is considered tax free.
Iain,
First off, I really enjoy reading your blog!
Secondly, while we're on the topic of banking/taxes etc I have a question? I'm a fellow Brit and, for lack of a better expression, am not familiar with the Pros and Cons of using go-betweens such as Neteller.
I haven't had the best of experiences with Neteller and unless I'm mistaken, the exchange rate for me to bring my US Dollar poker earnings into my UK Sterling Neteller account is not favourable at all.
I remember a few months ago I withdrew $3,000 from Royal Vegas via Neteller and then into Party Poker and I lost a couple hundred Dollars in doing so.
Is that a Neteller issue or a Poker site issue regarding what they set their own exchange rate at?
Can you, or anyone, please give me a little more insight into how to use Neteller more efficiently and effectively so that I don't encounter this shortfall again.
Thanks
This is regarding taxes in the Netherlands.
I've been trying to figure out exactly where I stand regarding poker earnings and taxes for 2 years now, and I still don't have a clue.
To the best of my knowlege there's one of two categories poker winnings might fall into that are taxable. One is "gambling tax", and the other is income tax.
You are required to request a certain form for every pot you win in excess of €454 and pay taxes over your winnings (needless to say nobody does this, because it's plainly ridiculous). For every pot smaller than €454 you're exempt from taxes.
If you're a 'professional' player (too vague a term for me to really know if I'm classified as such) you have what is known as a "free profession" and the government has no way of knowing how much money you make, but they do expect you to declare your income every month. Again, I don't know anyone who does this. Poker is a game of variance and what you win one month you might lose the next (theoretically).
There's some huge holes in the legislation, and there are many ways of interpreting existing laws, which causes a tremendous amount of confusi and anxiety among winning players.
It also recently became illegal for poker (and all gambling) sites to advertise to potential players from the Netherlands, without a license from the Dutch government. No such licences have been issued yet.
Only Holland Casino and the Lotto can legally offer gambling. If you knowingly gamble on a foreign site, you're breaking the law. There's a lot of legislation in place to maintain the monopoly these two partially state owned institutions currently have.
Because this is all very much a grey area, I really have no way of knowing how zealously they'll go after people who 'break' (it's all just interpretation, almost no concrete info) these laws. I think it's unlikely I'll ever get in trouble, but I'm still doing everything in my power to avoid it.
Actually I think there would be taxes in Finland if you chose to pay them.
Stu H, is your neteller account in GBP? If so, you lost money when neteller exchanged your $3000 into an equivalent amount of pounds, and then lost money again when you transferred your pounds into dollars when transferring to party. Neteller uses a grossly unfair exchange rate, plus they skim a percentage off the top.
Nikk (and others),
Does that mean I should change how my Neteller account if set up? Change it to Dollars.
Is there something better than Neteller for moving funds around between poker sites, a go-between like Neteller, and your own personal Bank?
Would really appreciate anyone has some experience with this because I'd rather not lose even more money when switching larger sums than $3K around.
Stu
Akka
What sites are truly tax free?
In Sweden Poker is looked at as a game of luck. And you cant pay tax for something who does not need any skill. So there is no taxes in Sweden if u play poker :)
anyone earning money as an affiliate here?
nice blog btw, compliments:)
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